It’s surprising to me that any investor in public stocks thinks share price is related to anything other than what investors are willing to pay. If everyone thinks price will go down, it doesn’t matter what underlying value exists, people will sell off. You hold on if you think investors will wise up at some arbitrary point in the future and buy it again. Which could theoretically be related to the value of AI, but is actually only about a monkey brain’s perception of value.
There is no underlying fundamental reason that makes stock price match company performance or value. It’s a gambling market that sometimes happens to match real financials
Stock price does not need to match company value *in the short run*. But company value exerts a tug on the share price, it won't succeed in pulling the share price to the correct value but it will in time correct the swings. Think of walking a dog on a long leash--the dog will wander but will end up where the human goes. Or even well-behaved dogs without a leash.
The underlying fundamental value is dividends, and the assumption that they will eventually be paid, after a growth period. I think a lot of people have forgotten this.
The future of markets is a vibes exchange, where fortunes are won and lost based on social media engagement, viral media, and influencer CEOs.
In the new world order the winners are not value investors and rational actors. The winners are the outrageous, the titillating, anyone who can capture a bit of attention span.
During the irrational slap-'AI'-on-everything to juice the stock.
Their current plan is the same as that shoe company that tried to rent out their warehouse space for AI compute.
Same plan as Meta, other than scammers using meta AI to scam our parents out of their money. (Meta makes billions off of this use case and really shouldn't)
At least there's a real aerospace company in there. The companies pivoting will have no value when the market corrects, but affordable aerospace launches will keep on keeping on.
If anything, the anti-datacenter NIMBYism that the AI craze is generating will far outlast the AI craze, and NIMBYism is the only thing that would make launching datacenters into space cost effective, so Space X may get a long-term boost out of the whole ordeal, whether or not they have internal success in the AI market.
Renting data center capacity to AI providers might be the best business model out there, currently related to AI. Surpassed possibly by hardware manufacturers.
I'm not so sure. Is there really a demand for more AI data centers? Has anyone been turned down by OpenAI or Antrophic because they are out of capacity?
I think the demand is more about what's not using AI yet, plus half the world isn't really dependent on online services and platforms yet, two huge areas of growth.
Late 80s. Back then my stock was actual paper certificates that I kept in a safe deposit box. My RIA lived in the town next to me and that was the only way I could make trades, and it took days to close and weeks to get your certificates. And I didn’t trade. I gave him money and he built my portfolio. The rise of online trading gamified the system that we have today.
It’s surprising to me that any investor in public stocks thinks share price is related to anything other than what investors are willing to pay. If everyone thinks price will go down, it doesn’t matter what underlying value exists, people will sell off. You hold on if you think investors will wise up at some arbitrary point in the future and buy it again. Which could theoretically be related to the value of AI, but is actually only about a monkey brain’s perception of value.
There is no underlying fundamental reason that makes stock price match company performance or value. It’s a gambling market that sometimes happens to match real financials
It's not surprising; anyone who thinks share price is something other than what investors are willing to pay has become someone's sucker.
And the industry could not exist without a strong foundation of suckers.
You’re not the only one saying this
https://finance.yahoo.com/markets/stocks/articles/buffett-to...
Attention matters when a stock is rising, fundamentals matter when a stock is falling.
Stock price does not need to match company value *in the short run*. But company value exerts a tug on the share price, it won't succeed in pulling the share price to the correct value but it will in time correct the swings. Think of walking a dog on a long leash--the dog will wander but will end up where the human goes. Or even well-behaved dogs without a leash.
The underlying fundamental value is dividends, and the assumption that they will eventually be paid, after a growth period. I think a lot of people have forgotten this.
The future of markets is a vibes exchange, where fortunes are won and lost based on social media engagement, viral media, and influencer CEOs.
In the new world order the winners are not value investors and rational actors. The winners are the outrageous, the titillating, anyone who can capture a bit of attention span.
Is it too late to pivot to Blockchain? https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-c...
xAI did lose all of their founders and they are rebooting the company because it was "built wrong"
There is such thing as negative AI value :)
You'd think Morgan Stanley would understand stuffing debt from one failing company into another semi-ok company.
And it is likely going to happen a fourth time when SpaceX merges with Tesla. The first time was when Tesla bought Solar City.
Yahoo's total value was worse than the Alibaba stock they owned. Their web services had negative value.
I wonder where all of this money is going
Isn't that why SpaceX "acquired" xAI?
Next step is to "acquire" Tesla and give himself full control again.
During the irrational slap-'AI'-on-everything to juice the stock.
Their current plan is the same as that shoe company that tried to rent out their warehouse space for AI compute.
Same plan as Meta, other than scammers using meta AI to scam our parents out of their money. (Meta makes billions off of this use case and really shouldn't)
At least there's a real aerospace company in there. The companies pivoting will have no value when the market corrects, but affordable aerospace launches will keep on keeping on.
If anything, the anti-datacenter NIMBYism that the AI craze is generating will far outlast the AI craze, and NIMBYism is the only thing that would make launching datacenters into space cost effective, so Space X may get a long-term boost out of the whole ordeal, whether or not they have internal success in the AI market.
except you're forgetting that the taxpayers have subsidized it to this point and it can't stand on it's own.
And then there's all the competition
Renting data center capacity to AI providers might be the best business model out there, currently related to AI. Surpassed possibly by hardware manufacturers.
I'm not so sure. Is there really a demand for more AI data centers? Has anyone been turned down by OpenAI or Antrophic because they are out of capacity?
There's certainly demand for more data centers. Whether there's demand for the services those data centers would provide remains in question.
I think the demand is more about what's not using AI yet, plus half the world isn't really dependent on online services and platforms yet, two huge areas of growth.
Nah, it might also imply 0 Grok value or 0 value in what Morgan Stanley says
I yearn for the days when companies were judged on profit. Not ideology. Vibes. Hypes. Tweets. White House visits. The goddamn singularity.
When was that?
Late 80s. Back then my stock was actual paper certificates that I kept in a safe deposit box. My RIA lived in the town next to me and that was the only way I could make trades, and it took days to close and weeks to get your certificates. And I didn’t trade. I gave him money and he built my portfolio. The rise of online trading gamified the system that we have today.